Vehicle allowance | 2023 Gotax
August 8, 2023
Is my motor vehicle allowance taxable?
Yes it sure is. Like all things income your motor vehicle allowance is a payment made by an employer to an employee to cover the costs of using their own car for work-related purposes. This allowance is considered taxable income and must be included on your tax return. However, you may be able to claim a tax deduction for the work-related expenses associated with using your car, such as fuel, registration, servicing, insurance, and depreciation.
To claim a deduction for car expenses, you must keep records of your work-related trips and expenses. You can use a diary, calendar, or an app like the GoTax Deduction Grabber App to help you keep track of your trips. You can then use this information to calculate your deduction using one of the methods approved by the Australian Taxation Office (ATO), such as the cents per kilometre method or the logbook method.
Download Deduction Grabber here..
How your motor vehicle allowance works:
Let’s say you receive a vehicle allowance of $5,000 from your employer to cover the costs of using your car for work. You would need to include this amount on your tax return as taxable income. However, if you kept records of your work-related trips and expenses and calculated that you spent $4,000 on fuel, registration, servicing, insurance, and depreciation for your car during the year, you could claim a tax deduction for this amount. This would reduce your taxable income by $4,000 and lower the amount of tax you need to pay.
Using an online tax service like GoTax can make it easy to claim your car expenses. Simply enter your income, tax withheld, and deductions, and GoTax will calculate your estimated refund. If you are unsure about what deductions you are entitled to, GoTax can guide you through the process and help you maximize your refund. So if you receive a vehicle allowance and want to claim a deduction for your car expenses, head over to gotax.com.au and get started!
Start your tax retiurn today, this hour, this minute, this second..... Right Now
Leave a Comment